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Chip Conley

Chip Conley

Posted: May 5, 2010 12:16 AM

Your Culture Is Your Brand

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Is it possible that your head of HR may also be your head brand strategist? That's hard for most companies to imagine. But, in the transparent "word-of-mouse" business world that exists today, your company culture and how it influences employee and customer engagement is the ultimate secret sauce that defines whether you're a Zappos or a zippo.

I had the great fortune of visiting Zappos' headquarters in the Las Vegas area a week ago. How many companies have customers who choose to throw their wedding inside their favorite company's offices? I saw it - complete with an Elvis impersonator and a real live minister - while strolling through Zappos' lively and colorful cubicles last Monday morning. Zappos' CEO Tony Hsieh chose to close down the offices that afternoon so that all 800 employees could come together to hear about Zappos big revenue progress and experience me giving a talk about the importance of addressing employees' and customers' higher needs as chronicled in my book PEAK. And, the day culminated with 52 different employee groups brainstorming about new ways to "wow" their customers and then a two-hour raging happy hour that was as wild as anything I've seen since my fraternity party days.

Frankly, the whole experience felt like a religious revival given the enthusiasm and sheer company faith I saw in the diverse employee pool. For me, it was like traveling to Mecca as I don't think I've ever seen a company so committed to living the "service profit chain" theory that came out of Harvard Business School a quarter century ago (which I document in PEAK): a unique culture creates happy employees which drives customer loyalty which leads to a profitable and sustainable business. There are many service industry companies that do this well - Southwest Airlines, In 'n Out Burger, Nordstrom's, Apple retail stores - but none does it better than Zappos. Tony Hsieh believes that in the noisy world of advertising, what cuts through the clutter is creating peak experiences for his employees and customers such that Zappos becomes a magnet for mojo. Zappos is also a money magnet as the company sold to Amazon for nearly $1.2 billion in stock last fall, primarily because Jeff Bezos marveled at the culture of this skyrocketing online shoe and clothing retailer.

What are some of my lasting impressions of Zappos beyond the wacky wedding and the Elvis impersonator?

(1) Zappos hires for attitude and trains for skill. First off, they do a four-week intensive training with all new employees that helps them understand the company's 10 core values. You may have heard of the contrarian approach Zappos takes to weed out those that aren't a great fit during training. At the end of the first week of training (during which employees are paid their full salary), they offer all new hires $2,000 to quit right then or at any time during the remaining three weeks of training. Zappos wants to make sure that their new employees aren't there purely for the paycheck, but that they want to live and breathe the culture. They've found that less than 1% of their new hires take them up on this offer.

(2) Culture is a fundamental part of how employees are evaluated and grown within the organization. 50% of an employee's performance review comes back to how they're living the culture, so relationships are just as important as results for rising superstars in this company.

(3) Their call center is seen not as a departmental cost that needs to be starved in order to maximize the bottom line, but instead it's an opportunity to create another brand touch point through a PEC (personal emotional connection). Only 5% of customers actually connect with Zappos' phone call center, but the company's well-deserved great reputation certainly has been solidified by the kind of customer service that is delivered by this engaged phone team.

(4) How many companies offer their customers tours of their headquarters? Not many. Even more impressive is the fact that you are picked up at the airport by an engaged Zapponista who transports you to their offices for free answering all kinds of questions along the way, takes you throughout the facility along with dozens of other Zappos evangelists, and then gives you a series of complimentary business books to choose from in their lobby library (including, happy to say, my book PEAK) to take with you.

Tony Hsieh's new book, Delivering Happiness, comes out in early June. Keep an eye out for it because there's no better example of how an engaged company culture creates a brand reputation that can lead to a billion dollar business.

 
 
 

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